Romney targets auto bailout in battle for Michigan

[February 16, 2012]  GRAND RAPIDS, Mich. (AP) -- Republican presidential candidate Mitt Romney is wooing tea partyers in his home state of Michigan with a potentially risky strategy: blasting the auto industry bailout that many people credit with saving the state's most vital industry.

The tactic seems designed to undermine Rick Santorum's popularity with conservatives who dislike government intervention in business, even when the results appear defensible. It also reinforces Romney's image as an experienced capitalist who understands the pain sometimes involved in making companies work.

Santorum's fast rise in national polls has forced Romney to sharpen his criticisms of the former Pennsylvania senator. Santorum says his team will "plant our flag" in Michigan while also campaigning in other states.

A Romney loss in Michigan's Feb. 28 primary would be hugely embarrassing, or worse, to his campaign. His team has promoted an aura of inevitability for months, but Romney has failed to persuade the party's most conservative segments to embrace him.

Romney's father was a top auto executive and three-term governor of Michigan, and Romney still holds big financial advantages over Santorum, Newt Gingrich and Ron Paul. Thus far, he has bought far more TV advertising time than they have.

Michigan Gov. Rick Snyder signaled his plans to endorse Romney on Thursday.

And yet, when longtime Michigan political analyst Craig Ruff was asked if a Romney loss here is conceivable, he said: "I'm astounded, but yes." Ruff worked for Republican Gov. William Milliken but now is an independent.

He said he was surprised by how vigorously Romney is criticizing the government rescue of General Motors and Chrysler in 2008-2009.

"Many, many Republicans have ties to the auto industry," through investments or current or former employment, Ruff said. "He's got a lot of explaining to do."

Some GOP activists, however, said Romney's actions make sense. He already was on record opposing the bailouts. So his Tuesday op-ed in the Detroit News gave him a chance to elaborate, they said. And his stance will appeal to business-oriented Republicans as well as more libertarian-leaning voters who oppose government intrusion in general.

"It may be dicey in the general election, but it's not dicey in the primary," said Lansing-based Republican strategist Steve Mitchell. "Republicans opposed the auto bailout. They opposed other bailouts. They oppose bailouts."

A May 2010 poll conducted by EPIC-MRA for the Detroit Free Press found that nearly two-thirds of Michigan adults thought the auto bailout was a good idea. Republicans were more closely divided, with 51 percent calling it a good idea, and 43 percent calling it a bad idea.

Santorum, Gingrich and Paul also criticized the auto industry rescue, but Romney's remarks have drawn more attention because of his ties to the state and the auto industry.

Santorum hopes Michigan's tea party supporters will vote in big numbers, possibly overwhelming Romney's advantage with party insiders. Insurgent candidates have done well here at times. Pat Robertson won the GOP primary in 1988. John McCain beat George W. Bush here in 2000 after then-Gov. John Engler promised Michigan would be Bush's firewall.

Romney made no mention of his GOP rivals or direct references to the auto bailout in an 18-minute speech to several hundred people at a rally Wednesday in Grand Rapids. He stuck to his standard attacks on President Barack Obama's handling of the economy.

The auto bailout started when the Bush administration loaned money to GM and Chrysler to keep them from collapsing during the 2008 financial crisis.

The Obama administration brought the total to $81 billion, and Obama now calls the results a triumph.

"When I took office, the American auto industry was on the verge of collapse. And there were some folks who said we should let it die," Obama said Wednesday in Wisconsin in a veiled swipe at Romney. "With a million jobs at stake, I refused to let that happen."

GM emerged from bankruptcy as a considerably smaller company. It has repaid billions of dollars, but the federal government still holds much of the firm.

Chrysler was forced to join forces with Fiat. The federal government and the United Auto Workers union also became big stockholders.

General Motors says it made $8 billion in profits in 2011. Chrysler claimed profits of $225 million for the fourth quarter of 2011.

In his op-ed, Romney said the car companies should have gone through regular bankruptcy procedures. Obama rushed in to help pro-Democratic labor unions while putting taxpayers at risk, Romney said, calling it "crony capitalism on a grand scale."

"Without his intervention, things there would be better," Romney wrote. "Managed bankruptcy may sound like a death knell. But in fact, it is a way for a troubled company to restructure itself rapidly."

Steven Rattner, who oversaw the auto rescue for Obama, told the Free Press that Romney's remarks were "a complete denial of the facts." There was no private financing at the time to sustain the car companies, which would have been shuttered and sold in pieces in normal bankruptcy procedures, he said.

Many nonpartisan economists agree with that view.

John Feehery, a Washington-based GOP strategist, said Romney is taking a risk. "My own view is that the auto bailout was pretty popular in Michigan, so re-litigating that is stupid," Feehery said.

As for Romney's stakes here, Feehery said: "Losing Michigan could be fatal."

Romney was campaigning in Grand Rapids on Wednesday. Both he and Santorum planned to appear in the Detroit area Thursday.

Michigan voters are just starting to see the sort of TV ads that flooded Iowa, South Carolina and other early states. Romney and Santorum, and the independent committees that support them, are airing or preparing to put up positive and negative ads.

A pro-Romney spot notes he "grew up in Michigan."

An anti-Santorum ad, which ran in earlier states, says Santorum voted five times in Congress to raise the federal debt ceiling, an issue the tea party has turned into a battle cry. The ad calls Santorum a "big spender" and "Washington insider."

Santorum is pushing back with an ad in which a Romney look-alike fires mud from a gun but ends up splattering himself. "Mitt Romney's ugly attacks are going to backfire," the narrator says.

It's not clear that Santorum can raise enough money to make it a fair fight on the airwaves. He says he has raised several million dollars since his surprise wins in the Minnesota and Colorado caucuses last week. But Democrats who track GOP media buys said Romney and his friendly political action committee have spent $1.8 million for TV time in Michigan, while Santorum has spent less than $45,000.

Santorum told The Associated Press he hopes to finish "a good strong second" in Michigan. "We think we can plant our flag there and do well," he said.

Romney's backers are praying Santorum doesn't do better than that.

[Associated Press; By CHARLES BABINGTON]

Associated Press writers Thomas Beaumont, Steve Peoples, Kasie Hunt and Kathy Barks Hoffman contributed to this report.

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